Auto-shopping sites target used car market

Auto-shopping and research websites are revving up development of products to mine the gold in used car sales.

In general, the initiatives promise to give used car shoppers either a better idea of the value of their own used cars, or more accurate prices they can expect to pay for used models.

The development is evidence both of fierce competition among the best-known car-shopping and research sites, and the strong used car market.

Last year, 35.8 million used cars and trucks were sold in the U.S., according to registration data from Ward's — more than twice the 15.6 million new vehicle sales last year.

Among used cars sold by new car dealers — roughly one-third the total — prices rose 1.6% in 2012, latest-available data from the National Automobile Dealers Association. New car prices were up 0.8% in the same year.

New car dealers' used car operations provide an approximate marketplace where price competition helps set basic values. But the two-thirds that change hands via private sales create an unruly bazaar where shoppers have a tougher time comparing prices and vehicles.

•The first used car initiative, announced today by Kelley Blue Book's kbb.com, provides a price range for used cars instead of a single, average price. Called "range-based pricing," it's similar to the approach used when the site reports selling prices for new cars.

The new approach, which uses the shopper's ZIP code to help judge local market prices, should "alleviate some of the friction from the shopping process by setting common expectations on pricing and valuation terminology for both buyers and sellers," said Jared Rowe, president of Kelley Blue Book.

Interleaving with its new car shopping feature, kbb.com signals the online shopper that an "upgrade" is possible — meaning a similar new car that is priced close to the used model.

Nearly all cars are bought with loans, and interest rates usually are lower on new cars.

•Edmunds.com plans to introduce a system that will list used car availability on the site and, it appears, will provide the same new-vs.-used choice that Kelley promises.

Edmunds CEO Avi Steinlauf says: "A lot of times folks are looking at both (new and used). We want to make sure our information is accessible for those who want to make those comparisons."

He wouldn't provide specifics, saying the used car shopping changes still are in final development, and a pilot version will be introduced the second half of this year.

•TrueCar, which went public Friday at $9 a share and quickly zipped to about $10 in Nasdaq trading, says a used car plan that it's calling TrueTrade is one of the keys to a money-making future.

President John Krafcik, previously CEO of Hyundai Motor America, says the TrueCar.com feature will "instantly provide you a guaranteed price at any one of our 8,000 used car dealers. You can take your car there right now and they'll print you a check."

That one will take awhile. Krafcik says it's "in development in 40 states. It isn't in our 2014 or 2015 plan."

Krafcik described TrueTrade thus: "Imagine an app on your phone. ... Take picture one, picture two, pictures of the interior. It takes you around the car. And answer a few questions. It's a virtual condition report."

Based on the photos and the answers, dealers from TrueCar's network will guarantee a price. If the owner's photos or answers are inaccurate, the price isn't guaranteed.

A big point of conflict is a used car's value. The owner, recalling the loving care he or she provided, thinks the car is very valuable. The dealer, foreseeing big reconditioning or detailing costs for today's perfection-minded buyers, thinks the car is worth less than the owner does.

TrueCar's network of dealers pays the website $299 for each new car sale to a customer referred from TrueCar.com, and $399 for each used car sale from a TrueCar.com user.

National Automobile Dealers Association data show that used car revenue averaged $12.2 million per dealership, and used vehicle sales averaged 694 cars and trucks per dealership in 2012, nearly identical to new vehicle sales, which averaged 698 per dealership.